[Federal Register Volume 61, Number 73 (Monday, April 15, 1996)]
[Proposed Rules]
[Pages 16598-16604]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-9095]




[[Page 16597]]


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Part IV





Environmental Protection Agency





_______________________________________________________________________



40 CFR Part 68



List of Regulated Substances and Thresholds for Accidental Release 
Prevention; Proposed Rule

  Federal Register / Vol. 61, No. 73 / Monday, April 15, 1996 / 
Proposed Rules  

[[Page 16598]]



ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 68

[FRL-5657-7]


List of Regulated Substances and Thresholds for Accidental 
Release Prevention; Proposed Amendments

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: The Environmental Protection Agency (EPA) is proposing several 
modifications to the rule listing regulated substances and threshold 
quantities under section 112(r) of the Clean Air Act as amended. EPA is 
proposing to delete the category of Division 1.1 explosives (as listed 
by DOT) from the list of regulated substances. Regulated flammable 
substances in gasoline used as fuel and in naturally occurring 
hydrocarbon mixtures prior to initial processing are proposed for 
exemption from threshold quantity determinations, and a clarification 
of the provision for threshold determination of flammable substances in 
a mixture is proposed. Modifications to the definition of stationary 
source are proposed to clarify the exemption of transportation and 
storage incident to transportation and to clarify that naturally 
occurring hydrocarbon reservoirs are not stationary sources or parts of 
stationary sources. In addition, EPA is clarifying that the Chemical 
Accident Prevention Provisions do not apply to sources located on the 
Outer Continental Shelf. EPA believes these proposed changes will 
better focus accident prevention activities on stationary sources with 
high hazard operations and reduce duplication with other similar 
requirements.

DATES: Comments. Comments must be submitted on or before May 15, 1996 
unless a hearing is requested by April 25, 1996. If a hearing is 
requested, written comments must be received by May 30, 1996.
    Public Hearing. Anyone requesting a public hearing must contact EPA 
no later than April 25, 1996. If a hearing is held, it will take place 
on April 30, 1996 at 9:30 a.m.

ADDRESSES: Comments. Comments should be mailed or submitted to: 
Environmental Protection Agency, Air Docket (6102), Attn: Docket No. A-
96-O8, Waterside Mall, 401 M St. SW, Washington, DC 20460. Comments 
must be submitted in duplicate. Comments may be submitted on disk in 
WordPerfect or Word formats. If a public hearing is held, written 
testimony should be submitted in duplicate at the time of the hearing.
    Public Hearing. If a public hearing is held, it will be held at 
Waterside Mall, 401 M St. SW, Washington, DC 20460, in the Conference 
Center in a room to be designated. Persons interested in attending the 
hearing or wishing to present oral testimony should notify by telephone 
Vanessa Rodriguez (see For Further Information Contact).
    Docket. The docket for this rulemaking is A-96-O8. This proposed 
rule would amend a final rule, the docket for which is A-91-74. The 
docket may be inspected between 8:00 am and 5:30 pm, Monday through 
Friday at EPA's Air Docket, Room M1500, Waterside Mall, 401 M St. SW, 
Washington, DC 20460; telephone (202) 260-7548. A reasonable fee may be 
charged for copying.

FOR FURTHER INFORMATION CONTACT: Vanessa Rodriguez, Chemical Engineer, 
Chemical Emergency Preparedness and Prevention Office, Environmental 
Protection Agency, OS-120, 401 M St. SW, Washington, DC 20460, (202) 
260-7913.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Introduction and Background
    A. Statutory Authority
    B. Background
    C. Summary of Final Rule
II. Discussion of Proposed Modifications
    A. Explosives
    B. Regulated Flammable Substances in Gasoline and in Naturally 
Occurring Hydrocarbon Mixtures
    C. Clarification of Threshold Determination for Mixtures 
Containing Flammable Substances
    D. Definition of Stationary Source
    E. Applicability to Outer Continental Shelf
III. Discussion of the Proposed Rule
IV. Required Analyses
    A. E.O. 12866
    B. Regulatory Flexibility Act
    C. Paperwork Reduction Act
    D. Unfunded Mandates

I. Introduction and Background

A. Statutory Authority

    This notice of proposed rulemaking (NPRM) is being issued under 
sections 112(r) and 301 of the Clean Air Act (Act) as amended (42 
U.S.C. sections 7412(r) and 7601).

B. Background

    The Clean Air Act (CAA or Act), section 112(r), contains 
requirements related to prevention of accidental releases. The goal of 
the accidental release provisions is to prevent accidental releases and 
minimize the consequences of releases by focusing on those chemicals 
and operations that pose the greatest risk. The CAA requires EPA to 
promulgate an initial list of at least 100 substances (``regulated 
substances'') that, in the event of an accidental release, are known to 
cause or may be reasonably expected to cause death, injury, or serious 
adverse effects to human health and the environment. The Act identifies 
16 substances to be included in the initial list. Factors required to 
be considered in listing substances are the severity of acute adverse 
health effects associated with accidental releases of the substance, 
the likelihood of accidental releases of the substance, and the 
potential magnitude of human exposure to accidental releases of the 
substance. The CAA also requires EPA to establish a threshold quantity 
for each chemical at the time of listing. In developing these 
thresholds, factors required to be considered include toxicity, 
reactivity, volatility, dispersibility, combustibility, or flammability 
of the substance and the amount of the substance which is known to 
cause or can be reasonably anticipated to cause death, injury, or 
serious adverse effects in case of a release. Stationary sources that 
have more than a threshold quantity of a regulated substance are 
subject to accident prevention regulations promulgated under CAA 
section 112(r)(7), including the requirement to develop risk management 
plans.
    EPA's final rule on the list of substances and thresholds (59 FR 
4478, January 31, 1994) (the ``List Rule'') promulgated the regulated 
list of substances and thresholds that identify sources subject to the 
accident prevention rules. EPA subsequently sought comment on a 
proposed accident prevention (``risk management program'') rule in two 
notices and intends to promulgate a final rule in late Spring 1996. 
(See 58 FR 54190, October 20, 1993; 60 FR 13526, March 13, 1995.) For 
additional information on the requirements of section 112(r) and 
related statutory provisions, see these notices.

C. Summary of the List Rule

    In the List Rule, EPA promulgated a list that includes 77 acutely 
toxic substances, 63 flammable gases and volatile flammable liquids, 
and Division 1.1 high explosive substances as listed by the United 
States Department of Transportation (DOT) in 49 CFR 172.101. The final 
rule establishes threshold quantities for toxic substances ranging from 
500 to 20,000 pounds. For all listed flammable substances, the 
threshold quantity is 10,000 pounds,

[[Page 16599]]

while all explosive substances have a threshold quantity of 5,000 
pounds. The rule sets forth the procedures for determining whether a 
threshold quantity of a regulated substance is present at a stationary 
source. Specific exemptions for quantities considered in the threshold 
determination are also included for mixtures, articles, and certain 
uses and activities. The rule also specifies the requirements for any 
petitions to the Agency requesting to add substances to, or delete 
substances from, the list.
    The criteria EPA considered in selecting substances for listing 
include severity of acute adverse health effects, likelihood of 
release, and potential magnitude of human exposure. EPA was required to 
set threshold quantities for each regulated substance considering its 
toxicity, reactivity, volatility, dispersibility, and flammability, as 
well as amounts known or anticipated to cause effects of concern.
    EPA selected commercially produced acutely toxic and volatile 
substances mostly from the list of extremely hazardous substances 
(EHSs) under section 302 of the Emergency Planning and Community Right-
to-Know Act (EPCRA). EPA chose volatile substances because they are 
more likely to become airborne and impact the public. EPA also 
considered accident history associated with a substance. One substance, 
oleum, was listed because it has a history of accidents that have 
impacted the public. Because vapor cloud explosions and blast waves 
from detonations of high explosives have caused injuries to the public 
and damage to the environment, EPA also included highly flammable gases 
and liquids and high explosives on the list.
    The American Petroleum Institute (API), the Institute of Makers of 
Explosives (IME), and one other party filed petitions for judicial 
review of the List Rule (American Petroleum Institute v. EPA, No. 94-
1273 (D.C. Cir.) and consolidated cases). On March 28, 1996, EPA made 
available for public comment under CAA section 113(g) proposed 
settlement agreements with API and IME (61 FR 13858, March 28, 1996).

II. Discussion of Proposed Modifications

    Following EPA's promulgation of regulated substances and thresholds 
in the List Rule, the petitioners mentioned above and other members of 
the regulated community raised a number of issues concerning the list 
and thresholds. Certain provisions of the List Rule that seemed 
inconsistent with EPA's intent expressed in the preamble or other 
documents supporting the final rule were identified. Additional 
information was also received addressing the concerns that led to the 
regulation. As a result, EPA is proposing the following amendments to 
the final rule: delisting explosives; exempting from threshold 
determination regulated flammable substances in gasoline and in 
naturally occurring hydrocarbon mixtures prior to initial processing; 
clarifying the provision for threshold determination of flammable 
substances in mixtures to exempt mixtures that do not have a National 
Fire Protection Association (NFPA) flammability hazard rating of 4; 
modifying the definition of stationary source to clarify the exemption 
of transportation and storage incident to transportation and to clarify 
that naturally occurring hydrocarbon reservoirs are not stationary 
sources or parts of stationary sources; and clarifying that the 
chemical accident prevention provisions do not apply to sources located 
on the Outer Continental Shelf (``OCS sources'').

A. Explosives

    In the final rule (59 FR 4478, January 31, 1994), EPA included 
explosives classified by DOT as Class 1, Division 1.1, and listed as 
such in 49 CFR 172.101 (the Hazardous Materials Table) as regulated 
substances with a threshold quantity of 5,000 pounds. Division 1.1 
explosives were listed because of their potential to readily detonate, 
causing offsite impacts. While acknowledging that explosives are 
regulated by a number of other agencies, EPA maintained that public 
safety would be enhanced if additional information about explosives, 
such as hazard assessments, were available to emergency response 
agencies and local emergency planners under section 112(r). EPA's 
primary concern was that there were gaps in the existing regulatory 
framework in the area of communication with emergency responders and 
local planners because existing regulations and programs were not 
comprehensive. EPA noted that public safety would be enhanced by 
additional coordination between facilities handling explosives and the 
local emergency planners and responders.
    Subsequent to promulgation of the List Rule, IME provided EPA with 
additional information about the extent of the regulatory gaps 
discussed above, including coordination with emergency responders. 
After additional review of other federal, state, and local laws and 
regulations for explosives, as well as industry practices for 
explosives manufacturing and storage, EPA has concluded that current 
regulations and current and contemplated industry practices promote 
safety and accident prevention in storage, handling, transportation, 
and use of explosives. As a result, these regulations and practices 
adequately protect the public and the environment from the hazards of 
accidents involving explosives. Explosives are regulated by the Bureau 
of Alcohol, Tobacco and Firearms (BATF), the Mine Safety and Health Act 
(MSHA), the Occupational Safety and Health Act (OSHA), the Department 
of Defense (DoD), the Department of Transportation (DOT), and state and 
local agencies. BATF's American Table of Distances (ATD) specifies 
distances for explosive storage from inhabited buildings, public 
highways, and passenger railways; these distances are great enough to 
ensure that an accidental explosion at a site that is in compliance 
with the ATD should not produce blast waves that are hazardous to 
people at distances where the public could be affected (the hazard to 
which the public could be exposed if a site complies with the ATD is 
significantly lower than that which the Agency would be protecting 
against with its listing of Division 1.1 explosives at a 5,000-pound 
threshold). Most facilities that manufacture or store explosives 
already are required to develop emergency response plans and to provide 
local emergency responders with copies of Material Safety Data Sheets 
(MSDSs) or lists of materials with MSDSs, or to advise local emergency 
responders regarding the type, quantity, and location of Division 1.1 
explosives on site.
    EPA's review of existing regulations and current industry practices 
still indicates that public safety would be enhanced if some sites 
handling explosives made additional information about explosives 
available to emergency responders and planners. While EPA does not 
believe there are many sites that are not already coordinating with 
local authorities under other regulatory and voluntary programs, public 
safety would be enhanced if there were additional coordination between 
the remaining facilities handling explosives and the local emergency 
planners and responders. To address the gaps EPA identified, IME has 
developed suggested safety practices that would be adopted in due 
course if EPA provides final consent to the proposed settlement 
agreement. These actions would provide additional information and 
enhance the coordination between explosives facilities and the 
emergency planners and responders. IME member companies would post 
signs at all

[[Page 16600]]

normal access routes stating, ``Danger. Never Fight Explosive Fires. 
Explosives are stored on this site,'' and providing an emergency phone 
number. Whenever a new Division 1.1 commercial explosives storage or 
manufacturing location is established at a temporary job site, IME 
member companies would notify Local Emergency Planning Committees and 
other local authorities (e.g., fire departments and law enforcement 
agencies) of the type, quantity, and location of explosives on site. At 
Division 1.1 commercial explosives storage or manufacturing locations 
with 5,000 pounds or more of Division 1.1 explosives (not including 
temporary job sites) where preparation of emergency response plans is 
not already required, IME member companies would prepare emergency 
response plans, notify Local Emergency Planning Committees and other 
local authorities of the type, quantity, and location of explosives on 
site, provide the emergency response plans to local emergency 
responders, and respond to reasonable requests for information from 
said authorities. IME member companies also would inform their 
customers of the contents of the Settlement Agreement and the actions 
to be taken. IME would respond to reasonable requests from law 
enforcement agencies and emergency responders for information 
concerning the safe storage, distribution, and use of explosives. IME 
also would distribute a letter to other non-IME commercial explosives 
manufacturers, distributors, and users informing them of the Settlement 
Agreement and actions to be taken. The Agency believes these actions 
effectively close the remaining gap in emergency planning and response 
communications, while allowing existing laws to prevail. Therefore, EPA 
is proposing to delist explosives from the list of regulated substances 
under section 112(r). EPA requests comments on whether explosives 
should be delisted.

B. Regulated Flammable Substances in Gasoline and in Naturally 
Occurring Hydrocarbon Mixtures

    In the threshold determination provisions for mixtures containing 
flammable regulated substances, the List Rule provides that such 
mixtures are exempt if the owner or operator can demonstrate that the 
mixture does not meet boiling point or flash point criteria; otherwise, 
the entire mixture is treated as a regulated substance unless another 
exemption applies. The boiling point and flash point are objectively 
determinable and derived from the definition of highly flammable 
liquids and gases, National Fire Protection Association (NFPA) 
flammability hazard rating of 4. Although EPA did not specifically 
exempt gasoline and naturally occurring hydrocarbon mixtures (e.g., 
crude oil) from threshold determination, it did not intend the List 
Rule to cover regulated flammable substances in mixtures that do not 
meet the NFPA 4 criteria. Gasoline and crude oil are listed with NFPA 
flammability ratings of 3 in Fire Hazard Properties of Flammable 
Liquids, Gases, and Volatile Solids, NFPA 325M (1991 edition). EPA 
noted in Proposed List of Substances and Threshold for Accidental 
Release Prevention: Summary and Response to Comments (1994) that it 
believed gasoline does not meet the boiling point criterion for 
listing. EPA also noted that it considered unlisted hydrocarbons that 
fail to meet the NFPA 4 criteria to represent a lower priority for 
accident prevention.
    The NFPA criteria contain both the objective elements included in 
EPA's rule as well as certain judgmental criteria. NFPA 4, as defined 
in the NFPA Standard System for the Identification of Fire Hazards of 
Materials, NFPA 704 (1990 edition), includes the following:
    ``Materials that will rapidly or completely vaporize at atmospheric 
pressure and normal ambient temperature, and which will burn readily. 
This degree usually includes:
    Flammable gases;
    Flammable cryogenic materials;
    Any liquid or gaseous material that is liquid while under pressure 
and has a flash point below 73  deg.F (22.8  deg.C) and a boiling point 
below 100  deg.F (37.8  deg.C) (i.e., Class IA flammable liquids);
    Materials that ignite spontaneously in air.''
    Thus, the promulgated threshold determination provision does not 
exempt mixtures that meet the flash point and boiling point criteria, 
but that do not rapidly or completely vaporize and, therefore, are not 
true NFPA 4 mixtures based on the full definition. In particular, 
certain grades of gasoline and some naturally occurring hydrocarbon 
mixtures might be subject to threshold determination under the 
provisions of the final rule, based on the flash point and boiling 
point criteria, even though these mixtures do not meet the judgmental 
criteria of NFPA 4.
    To better reflect EPA's original intent to exempt non-NFPA 4 
mixtures and to clarify the regulatory status of gasoline and naturally 
occurring hydrocarbon mixtures (e.g., crude oil and natural gas 
condensate), EPA is proposing to provide specific exemptions from 
threshold determination for regulated flammable substances in gasoline 
used as fuel for internal combustion engines and for regulated 
substances in naturally occurring hydrocarbon mixtures prior to initial 
processing in a petroleum refining process unit or a natural gas 
processing plant. Naturally occurring hydrocarbon mixtures would 
include any or any combination of the following: condensate, crude oil, 
field gas, and produced water. EPA is proposing definitions of these 
substances for inclusion in the rule and is also proposing definitions 
of petroleum refining process unit and natural gas processing plant. 
EPA believes the proposed definitions reflect standard, widely accepted 
meanings of these terms.
    EPA believes gasoline and the naturally occurring hydrocarbon 
mixtures condensate and crude oil, because they contain many non-
volatile components, have low potential for vapor cloud explosions (the 
basis for listing flammable substances under CAA section 112(r)), even 
if, in some cases, they may meet the flash point and boiling point 
criteria cited in the final rule. Produced water in naturally occurring 
hydrocarbon mixtures would likely reduce the flammability and potential 
for vapor cloud explosion of these mixtures. EPA believes field gas, 
prior to initial processing, also has low potential for vapor cloud 
explosions that might have an impact on the public. Exploration and 
production facilities likely do not have many congested areas or 
confined spaces; congested areas or turbulent conditions (in an 
advancing flame front) generally are necessary for a vapor cloud 
explosion to occur. On-site processes are relatively simple, and there 
are unlikely to be many ignition sources. The American Petroleum 
Institute (API) evaluated the potential consequences of releases of 
naturally occurring hydrocarbon mixtures at oil and gas exploration and 
production facilities, as discussed in Hazard Assessment of Exploration 
and Production Facilities Potentially Subject to the Environmental 
Protection Agency's Risk Management Program Regulations (January 20, 
1995) (see docket), and concluded that hazard distances were generally 
very short for the types of facilities evaluated. Finally, EPA believes 
these explicit, specific, and clear exemptions for gasoline and 
naturally occurring hydrocarbons are useful in addition to revising the 
flammable mixture provision to better reflect NFPA 4, because they 
simplify the task of applying the judgmental criteria of NFPA 4 for 
these pervasive mixtures.

[[Page 16601]]

    As naturally occurring hydrocarbon mixtures undergo processing in a 
petroleum refining process unit or a natural gas processing plant, the 
potential for a vapor cloud explosion likely increases. The processes 
are more complex, there may be significant on-site congestion from 
buildings and equipment, flammable substance may be stored in large 
quantities, and there may be many ignition sources. The components of 
crude oil and condensates may be separated based on volatility. The 
more volatile mixtures (or purified substances) resulting from such 
processing may meet the criteria for NFPA 4 and, therefore, would need 
to be considered for threshold determination in accordance with the 
provisions for threshold determination of regulated flammable 
substances in mixtures, as discussed in the next section of this 
preamble. Similarly, before gasoline is finally formulated into a fuel 
for internal combustion engines, during processing in a refinery, it 
may meet the criteria for NFPA 4 and, therefore, would need to be 
considered for threshold determination in accordance with the 
provisions for threshold determination of regulated flammable 
substances in mixtures.
    EPA requests comments on the proposed exemption from threshold 
determination for gasoline used as fuel for internal combustion engines 
and specifically requests comments on whether the qualifying phrase, 
``used as fuel for internal combustion engines,'' is a necessary part 
of the exemption. EPA also requests comments on the proposed exemption 
for regulated substances in naturally occurring hydrocarbon mixtures 
prior to initial processing and on the proposed definitions related to 
the exemption for naturally occurring hydrocarbon mixtures.

C. Clarification of Threshold Determination of Regulated Flammable 
Substances in Mixtures

    In the final rule, EPA provided flash point and boiling point 
criteria for determining whether a mixture containing a regulated 
flammable substance is subject to threshold determination. Although 
these flash point and boiling point criteria are associated with an 
NFPA rating of 4, the NFPA rating was not specifically cited as a 
criterion. As discussed in the preamble to the List Rule, EPA believes 
that mixtures that do not have an NFPA rating of 4 should not be 
subject to threshold determination. Based on comments from the 
regulated community, EPA now believes the flash point and boiling point 
criteria, although they are part of the criteria for the NFPA 4 rating, 
are not adequate by themselves to identify mixtures with the NFPA 4 
rating. As noted above, the NFPA 4 rating applies to substances that 
will rapidly or completely vaporize at atmospheric pressure and normal 
ambient temperature or that are readily dispersed in air, and that will 
burn readily. Like gasoline and crude oil, which have NFPA 3 ratings 
for flammability, other mixtures may contain low boiling flammable 
components that would cause the mixture to meet the flash point and 
boiling point criteria, but also contain higher boiling components that 
would prevent the mixture from rapidly or completely vaporizing. To 
clarify threshold determination for mixtures, EPA is proposing to 
provide that, for mixtures that have one percent or greater 
concentration of a regulated flammable substance, the entire weight of 
the mixture shall be treated as the regulated substance unless the 
owner or operator can demonstrate that the mixture does not have an 
NFPA flammability hazard rating of 4, as defined in the NFPA Standard 
System for the Identification of Fire Hazards of Materials, NFPA 704-
1990. EPA requests comments on this proposed clarification, which would 
be in addition to the specific exemption proposed for gasoline and 
naturally occurring hydrocarbons.

D. Definition of Stationary Source

    The List Rule defined stationary source to exclude transportation, 
including storage incident to transportation, provided such 
transportation is regulated under 49 CFR parts 192, 193, or 195. In 
addressing issues related to EPCRA, which also excludes transportation 
in commerce for most purposes, EPA has interpreted the transportation 
exclusion to exempt substances being transported in commerce or in 
storage under active shipping papers and to treat as a ``stationary 
item'' any storage in containers not under active shipping papers. In 
the List Rule, EPA referred to DOT pipeline regulations under 49 CFR 
parts 192, 193, and 195, and stated in the Preamble that pipelines, 
transfer stations, and other activities already covered by DOT would be 
excluded. Furthermore, EPA intended to exclude from the definition of 
stationary source all transportation and storage incident to such 
transportation to be consistent with EPCRA. EPA believes the List Rule 
definition of stationary source clearly covers transportation 
containers only when they are no longer in transportation in commerce 
and clearly excludes pipelines as defined by DOT; however, based on 
comments from the regulated community, EPA believes there still may be 
potential for overlap and confusion regarding the jurisdiction and 
regulatory responsibility of EPA and DOT for pipelines and for 
transportation containers at stationary sources.
    The Agency has received questions regarding the language in the 
stationary source definition that refers to ``transportation containers 
no longer under active shipping papers.'' Both EPA and DOT agree this 
term would generally apply to containers that are not in transportation 
in commerce and that are at the stationary source for purposes of 
storage, loading, or unloading that is not incidental to transportation 
in commerce. ``Transportation in commerce'' is defined by DOT pursuant 
to Federal Hazardous Materials Transportation Law (Federal HAZMAT Law, 
49 U.S.C. sections 5107-5127). As a result of continued questions 
regarding the scope of Federal HAZMAT Law and the applicability of the 
regulations issued thereunder, DOT is currently working to better 
delineate and more clearly define the applicability of its regulations. 
DOT currently contemplates clarifying its jurisdiction through the 
rulemaking process. As a result, there may be a future need for EPA to 
further amend the definition of stationary source to better comport 
with DOT clarifications or actions. The Agency will continue to work 
closely with DOT to minimize overlap and confusion with respect to 
jurisdiction and items in transportation and will coordinate with DOT 
to ensure that consistent interpretations about regulations coverage 
are provided to the regulated community.
    EPA is proposing several amendments to the definition of stationary 
source to reflect more clearly EPA's intent. First, EPA is proposing to 
modify the definition of stationary source to clarify that exempt 
transportation shall include, but not be limited to, transportation 
activities subject to regulation or oversight under 49 CFR parts 192, 
193, or 195, as well as transportation subject to natural gas or 
hazardous liquid programs for which a state has in effect a 
certification under 49 U.S.C. section 60105. DOT established safety 
standards for pipeline facilities used in the transportation of natural 
gas by pipeline in 49 CFR part 192, for liquefied natural gas 
facilities in 49 CFR part 193, and for pipeline facilities used in the 
transportation of hazardous liquids by pipeline in 49 CFR part 195. 
State programs with certifications under 49 U.S.C. section 60105 are 
comparable to the DOT

[[Page 16602]]

requirements and thus ensure public safety.
    In addition, EPA is proposing to modify the definition of 
stationary source to clarify that naturally occurring hydrocarbon 
reservoirs are not stationary sources or parts of stationary sources. 
This interpretation is consistent with EPA's policy under EPCRA. API 
concluded in the Hazard Assessment of Exploration and Production 
Facilities Potentially Subject to the Environmental Protection Agency's 
Risk Management Program Regulations (January 20, 1995) that the flow of 
hydrocarbons from reservoirs would not contribute to the magnitude of a 
catastrophic release scenario. This conclusion was based on consequence 
analysis of a range of fire and explosion events, assuming a range of 
handling conditions, types of equipment, and material compositions 
typical of exploration and production facilities. Finally, EPA is 
clarifying that the exemption for transportation containers in 
transportation in commerce or storage incident to such transportation 
is not limited to pipelines. EPA requests comments on these proposed 
revisions to the stationary source definition.

E. Applicability to Outer Continental Shelf

    EPA is proposing an applicability exception for sources on the 
outer continental shelf (OCS sources). Such an exception is consistent 
with CAA section 328, which precludes the applicability of EPA CAA 
rules to such sources when such rules are not related to attaining or 
maintaining ambient air quality standards or to the ``prevention of 
significant deterioration'' provisions of the CAA.

III. Summary of Proposed Revisions to the Rule

    EPA is proposing to amend several sections of part 68 of title 40 
of the Code of Federal Regulations.
    In Sec. 68.3, the definition of stationary source would be revised. 
The revised definition would specifically state that naturally 
occurring hydrocarbon reservoirs are not stationary sources or parts of 
stationary sources. The definition would state that exempt 
transportation shall include, but not be limited to, transportation 
activities subject to regulation or oversight under 49 CFR parts 192, 
193, or 195, as well as transportation subject to natural gas or 
hazardous liquid programs for which a state has in effect a 
certification under 49 U.S.C. section 60105.
    Several new definitions are proposed for Sec. 68.3, for condensate, 
crude oil, field gas, natural gas processing plant, petroleum refining 
process unit, and produced water.
    Section 68.10 is proposed to be amended to clarify that part 68 
does not apply to OCS sources.
    Several revisions are proposed for Sec. 68.115 on threshold 
determination. Section 68.115(b)(2) is proposed to be modified to state 
that the entire weight of the mixture containing a regulated flammable 
substance shall be treated as the regulated substance unless the owner 
or operator can demonstrate that the mixture does not have an NFPA 
flammability hazard rating of 4. Another proposed modification to 
Sec. 68.115(b)(2) would exempt from threshold determination regulated 
flammable substances in gasoline used as fuel in internal combustion 
engines. Regulated substances in naturally occurring hydrocarbon 
mixtures (including condensate, crude oil, field gas, and produced 
water), prior to entry into a natural gas processing plant or a 
petroleum refining process unit, also are proposed to be exempt from 
threshold determination. Section 68.115(b)(3), on concentrations of a 
regulated explosive substance in a mixture, is proposed to be deleted, 
and 68.115(b)(4), 68.115(b)(5), and 68.115(b)(6) would be redesignated 
as 68.115(b)(3), 68.115(b)(4), and 68.115(b)(5).
    Section 68.130 is proposed to be modified by the deletion of (a), 
explosives listed by DOT as Division 1.1. Section 68.130(b) would be 
redesignated as 68.130(a), and 68.130(c) would be 68.130(b).

IV. Required Analyses

A. E.O. 12866

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), the 
Agency must judge whether the regulatory action is ``significant,'' and 
therefore subject to OMB review and the requirements of the Executive 
Order. The Order defines ``significant regulatory action'' as one that 
is likely to result in a rule that may:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, jobs, the environment, public health or safety, 
or state, local, or tribal government or communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    It has been determined this proposed rule is not a ``significant 
regulatory action'' under the terms of Executive Order 12866 and 
therefore is not subject to OMB review.

B. Regulatory Flexibility Act

    In accordance with the Regulatory Flexibility Act of 1980, Federal 
agencies must evaluate the effects of the rule on small entities and 
examine alternatives that may reduce these effects.
    EPA has examined the proposed rule's potential effects on small 
entities as required by the Regulatory Flexibility Act. It has 
determined that this rule will have no adverse effect on small entities 
because it reduces the number of substances that would be used to 
identify stationary sources for regulation and provides exemptions that 
will likely reduce the number of stationary sources subject to the 
accidental release prevention requirements. Therefore, I certify that 
today's proposed rule will not have a significant economic effect on a 
substantial number of small entities.

C. Paperwork Reduction Act

    This proposed rule does not include any information collection 
requirements for OMB to review under the provisions of the Paperwork 
Reduction Act of 1980, 44 U.S.C. 3501 et seq.

D. Unfunded Mandates

    Under section 202 of the Unfunded Mandates Reform Act of 1995, 
signed into law on March 22, 1995, EPA must prepare a statement to 
accompany any rule where the estimated costs to State, local, or tribal 
governments in the aggregate, or to the private sector, will be $100 
million or more in any one year. Under section 205, EPA must select the 
most cost-effective and least burdensome alternative that achieves the 
objective of the rule and is consistent with statutory requirements. 
Section 203 requires EPA to establish a plan for informing and advising 
any small governments that may be significantly impacted by the rule.
    EPA has estimated that this rule does not include a Federal mandate 
that may result in estimated costs of $100 million or more to either 
State, local, or tribal governments in the aggregate, or to the private 
sector.

List of Subjects in 40 CFR Part 68

    Environmental protection, Chemicals, Chemical accident prevention, 
Clean Air Act, Extremely hazardous substances, Incorporation by 
reference, Intergovernmental relations, Hazardous

[[Page 16603]]

substances, Reporting and Recordkeeping requirements.

    Dated: April 5, 1996.
Carol M. Browner,
Administrator.

    For the reasons set out in the preamble, Title 40, Chapter I, 
Subchapter C, Part 68 of the Code of Federal Regulations is proposed to 
be amended as follows:

PART 68--CHEMICAL ACCIDENT PREVENTION PROVISIONS

    1. The authority citation for part 68 continues to read as follows:

    Authority: 42 U.S.C. sections 7412(r), 7601.

Subpart A--General

    2. Section 68.3 is proposed to be amended by adding the following 
definitions in alphabetical order and revising the definition of 
stationary source to read as follows:


Sec. 68.3   Definitions.

* * * * *
    Condensate means hydrocarbon liquid separated from natural gas that 
condenses due to changes in temperature, pressure, or both, and remains 
liquid at standard conditions.
    Crude oil means any naturally occurring, unrefined petroleum 
liquid.
* * * * *
    Field gas means gas extracted from a production well before the gas 
enters a natural gas processing plant.
    Natural gas processing plant (gas plant) means any processing site 
engaged in the extraction of natural gas liquids from field gas, 
fractionation of mixed natural gas liquids to natural gas products, or 
both. A separator, dehydration unit, heater treater, sweetening unit, 
compressor, or similar equipment shall not be considered a ``processing 
site'' unless such equipment is physically located within a natural gas 
processing plant (gas plant) site.
    Petroleum refining process unit means a process unit used in an 
establishment primarily engaged in petroleum refining as defined in the 
Standard Industrial Classification code for petroleum refining (2911) 
and used for the following: (1) Producing transportation fuels (such as 
gasoline, diesel fuels, and jet fuels), heating fuels (such as 
kerosene, fuel gas distillate, and fuel oils), or lubricants; (2) 
Separating petroleum; or (3) Separating, cracking, reacting, or 
reforming intermediate petroleum streams.
    Examples of such units include, but are not limited to, petroleum-
based solvent units, alkylation units, catalytic hydrotreating, 
catalytic hydrorefining, catalytic hydrocracking, catalytic reforming, 
catalytic cracking, crude distillation, lube oil processing, hydrogen 
production, isomerization, polymerization, thermal processes, and 
blending, sweetening, and treating processes. Petroleum refining 
process units include sulfur plants.
* * * * *
    Produced water means water extracted from the earth from an oil or 
natural gas production well, or that is separated from oil or natural 
gas after extraction.
* * * * *
    Stationary source means any buildings, structures, equipment, 
installations, or substance emitting stationary activities which belong 
to the same industrial group, which are located on one or more 
contiguous properties, which are under the control of the same person 
(or persons under common control), and from which an accidental release 
may occur. A stationary source includes transportation containers that 
are no longer under active shipping papers and transportation 
containers that are connected to equipment at the stationary source for 
the purposes of temporary storage, loading, or unloading. A stationary 
source does not include naturally occurring hydrocarbon reservoirs. The 
term stationary source does not apply to transportation, including 
storage incident to transportation, of any regulated substance or any 
other extremely hazardous substance under the provisions of this part. 
Transportation includes, but is not limited to, transportation subject 
to oversight or regulation under 49 CFR parts 192, 193, or 195, or a 
state natural gas or hazardous liquid program for which the state has 
in effect a certification to DOT under 49 U.S.C. section 60105. 
Properties shall not be considered contiguous solely because of a 
railroad or gas pipeline right-of-way.
    3. Section 68.10, as proposed at 60 FR 13543, is further amended by 
adding a paragraph (e) to read as follows:


Sec. 68.10   Applicability.

* * * * *
    (e) The provisions of this part shall not apply to an Outer 
Continental Shelf (``OCS'') source, as defined in 40 CFR 55.2.

Subpart C--Regulated Substances for Accidental Release Prevention

    4. Section 68.115 is proposed to be amended by revising paragraph 
(b) introductory text and paragraph (b)(2); removing paragraph (b)(3); 
and by redesignating paragraphs (b)(4) as (b)(3), (b)(5) as (b)(4), and 
(b)(6) as (b)(5) to read as follows:


Sec. 68.115   Threshold determination.

* * * * *
    (b) For the purposes of determining whether more than a threshold 
quantity of a regulated substance is present at the stationary source, 
the following exemptions apply:
* * * * *
    (2) Concentrations of a regulated flammable substance in a mixture.
    (i) General provision. If a regulated substance is present in a 
mixture and the concentration of the substance is below one percent by 
weight of the mixture, the mixture need not be considered when 
determining whether more than a threshold quantity of the regulated 
substance is present at the stationary source. Except as provided in 
paragraph (b)(2) (ii) and (iii) of this section, if the concentration 
of the substance is one percent or greater by weight of the mixture, 
then, for purposes of determining whether a threshold quantity is 
present at the stationary source, the entire weight of the mixture 
shall be treated as the regulated substance unless the owner or 
operator can demonstrate that the mixture itself does not have a 
National Fire Protection Association flammability hazard rating of 4. 
The demonstration shall be in accordance with the definition of 
flammability hazard rating 4 in the NFPA 704, Standard System for the 
Identification of the Fire Hazards of Materials, National Fire 
Protection Association, Quincy, MA, 1990. Available from the National 
Fire Protection Association, 1 Batterymarch Park, Quincy, MA 02269-
9101. This incorporation by reference was approved by the Director of 
the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 
51. Copies may be inspected at the Environmental Protection Agency Air 
Docket (6102), Attn: Docket No. A-96-08, Waterside Mall, 401 M. St. 
SW., Washington D.C.; or at the Office of Federal Register at 800 North 
Capitol St., NW, Suite 700, Washington, D.C. (Note: this document will 
only be available for inspection at the Federal Register after this 
action becomes a final rule.) Boiling point and flash point shall be 
defined and determined in accordance with NFPA 321, Standard on the 
Basic Classification of Flammable and Combustible Liquids, National 
Fire Protection Association, Quincy, MA, 1991. Available from the 
National Fire Protection Association, 1 Batterymarch Park, Quincy, MA 
02269-9101. This

[[Page 16604]]

incorporation by reference was approved by the Director of the Federal 
Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Copies 
may be inspected at the Environmental Protection Agency Air Docket 
(6102), Attn: Docket No. A-96-08, Waterside Mall, 401 M. St. SW., 
Washington D.C.; or at the Office of Federal Register at 800 North 
Capitol St., NW, Suite 700, Washington, D.C. (Note: this document will 
only be available for inspection at the Federal Register after this 
action becomes a final rule.) The owner or operator shall document the 
National Fire Protection Association flammability hazard rating.
    (ii) Gasoline. Regulated substances in gasoline, when in 
distribution or related storage for use as fuel for internal combustion 
engines, need not be considered when determining whether more than a 
threshold quantity is present at a stationary source.
    (iii) Naturally occurring hydrocarbon mixtures. Prior to entry into 
a natural gas processing plant or a petroleum refining process unit, 
regulated substances in naturally occurring hydrocarbon mixtures need 
not be considered when determining whether more than a threshold 
quantity is present at a stationary source. Naturally occurring 
hydrocarbon mixtures include any combination of the following: 
condensate, crude oil, field gas, and produced water, each as defined 
in Sec. 68.3 of this part.
* * * * *


Sec. 68.130   [Amended]

    5. Section 68.130 is proposed to be amended by removing paragraph 
(a) and redesignating paragraph (b) as (a), and paragraph (c) as (b). 
The tables to the section remain unchanged.

[FR Doc. 96-9095 Filed 4-12-96; 8:45 am]
BILLING CODE 6560-50-P